The decision of July 23, 1998 of the United States Court of Appeals for the Federal Circuit in State Street Bank & Trust Company v. Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), often called simply State Street decision or State Street Bank decision, was an important court decision concerning United States patent law and more particularly the patentability of so-called business methods. Basically, since this decision, an invention is considered eligible for protection by a patent in the United States if it involves some practical application and "it produces a useful, concrete and tangible result."

Overview

On March 9, 1993, Signature Financial Group, Inc. was granted entitled "Data Processing System for Hub and Spoke Financial Services Configuration". The "spokes" were mutual funds that pool their assets in a central "hub". That the invention described and claimed in the patent constituted protectible subject matter was affirmed by Court of Appeals in July 1998.

The court held that

"(...) the transformation of data, representing discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price, constitutes a practical application of a mathematical algorithm, formula, or calculation, because it produces 'a useful, concrete and tangible result' -- a final share price momentarily fixed for recording and reporting purposes and even accepted and relied upon by regulatory authorities and in subsequent trades."

This is significant because previously "methods of doing business" had not widely been considered patentable, although some argue that the issue was never directly addressed by the courts until the State Street decision. It now appears that the notion that "anything under the sun made by man is ^* patentable" (a phrase from the U.S. Supreme Court ruling in the Chakrabarty decision based on a 1952 report from the Congress) can be applied to any business method that produces a useful, concrete and tangible result.

According to many, this ruling was the major impetus behind the recent boom in software and business method patents. Some commentators see the boom as harmful and others as beneficial.

See also

• Business method patent
• Diamond v. Diehr
• Ex Parte Lundgren
• Freeman-Walter-Abele Test
• Diamond v. Chakrabarty

External links

• "State Street" Decision Causes "Boom" in Software Patent Filings A good, concise summary.
• Commentary on Cornell University web site

United States Court of Appeals cases | United States patent case law